As cash becomes more obsolete in the age of technology, credit and debit cards are becoming the new norm. More and more teens are having the opportunity to have a debit or credit card. There are many positives and negatives to credit and debit cards, especially for teens under the age of 18.
Many teenagers don’t understand the concepts of safe spending habits that are associated with having a credit card and would be better off with a debit or prepaid card.
Debit cards allow for extra convenience and money safety, especially for those students with part-time jobs. It would not be safe for students to be walking around with a lot of cash in their pockets. People walking around with a lot of cash run the risk of losing their money or theft. It is much easier to replace money that is lost on a card. A card also runs a smaller risk of getting stolen than cash.
Credit cards can also help students who have reliable sources of income build their credit scores. Having a strong credit score will be an extremely valuable tool for students as they are finishing their high school career and starting out in the adult world. Establishing safe spending habits with a credit card is also easier in high school when students have less financial responsibilities and can easily get their parents to help them out of a tough spot or advise them. This all applies only if the student is careful with their spending, of course.
Although credit and debit cards may have a few positive impacts, they also have some negative ones, such as improper spending and financial consequences.
Improper spending is more likely to happen with credit cards because the money is not taken out of your bank account right away. The bill instead comes all at once at the end of the month, which may be hard to keep track of for some students and result in a large bill. Financial consequences are also much easier to acquire with a credit or debit card than with cash. There are many penalties on credit cards such as late fees and interest but you can also receive consequences with debit cards. If you were to use more money than you had in your bank account, the bank would charge you an overdraft fee. These fees on credit and debit cards can add up quickly and cause a large headache.
While having a credit or debit card is a big responsibility, it is necessary for high school students to have them, especially if they have a job and are earning their own money. Learning healthy spending habits and how to manage finances is a valuable life skill that can be picked up at a low risk in high school. Debit cards are obviously the safer option and might be a good stepping stone before getting a credit card but both are valuable tools for becoming a responsible adult.